Merkel warns next year will be full of bad economic news

AFP/The Local
AFP/The Local - [email protected] • 22 Nov, 2008 Updated Sat 22 Nov 2008 13:17 CEST
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German Chancellor Angela Merkel warned in an interview released Saturday that 2009 could be “a year of bad news” for the economy but that government action had stabilised the financial markets.

“We must expect that next will be a year of bad news, at least in the first months,” Merkel was quoted as saying in an interview to be published in the Welt am Sonntag newspaper.

The conservative leader said it was harder than before to predict the progress of the international and German economic situations.

“We have stabilised the financial markets thanks to a series of measures for the banks, but confidence still has to be found again and the interbanking market must become functional again,” in Germany, Merkel said.

The government last month set up a special fund offering up to €400 billion in guarantees to get the interbank lending market functioning again, and up to €80 billion in direct cash infusions to bolster bank balance sheets.

The cabinet then approved a €23 billion stimulus package on November 5 to help Europe’s biggest economy and the world’s top exporter avoid the worst effects of a sharp global slowdown before a hoped-for recovery in 2010.

The plan, which has to be submitted to parliament, seeks to protect jobs and put the economy “back on its feet in 2010,” Merkel said.

In her weekly Internet video message, the German leader warned that “it will not be easy because this international financial crisis has repercussions on the economy but also on jobs in Germany.”



AFP/The Local 2008/11/22 13:17

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